Council receives auditors' report showing unmodified opinion; finance staff kicks off FY 2025–26 budget process

Assistant Finance Director Linda Tang and audit manager Terry Robinson of Moss, Levy & Hartenstein presented the City of San Gabriel’s annual comprehensive financial report for the fiscal year ended June 30, 2024, and reported that auditors issued an unmodified (clean) opinion on the city’s financial statements.

Why it matters: The auditors’ clean opinion and the city’s rising reserves affect near-term budgeting and long-term planning for infrastructure, pensions and capital projects such as the Mission Playhouse and public-safety facilities.

Tang told council that the general fund had revenue and transfers in of about $55.145 million, expenditures and transfers out of about $49.738 million, and a positive net change in fund balance of $5.407 million, bringing the general fund ending balance to about $21.171 million. Tang said the city has met its 25% reserve goal; the assigned contingency or reserves for the general fund were $12.43 million as of June 30, 2024, and the council had directed that amounts above the 25% target be used to pay down retiree liabilities and fund capital replacements.

The audit firm also provided an agreed-upon procedure report on the city’s appropriation limit and reported no exceptions. Tang noted accounting changes implemented in prior years under Governmental Accounting Standards Board rules such as GASB 96 for subscription-based IT arrangements.

In discussion, auditors said the city’s internal controls and closing processes were generally strong and that there were not material management comments to report. Council members with accounting backgrounds thanked staff and auditors for a clear presentation; one councilmember noted that management letters or single-audit items sometimes appear in separate reports.

Finance Director Will Kaholukula then opened the FY 2025–26 budget process. He reviewed the schedule and the city’s budget priorities: maintaining streets, parks and facilities; public safety (police and fire, including homeless and mental-health response); economic development; community services (youth and seniors); special events and maintaining the 25% reserve. He said departments received worksheets the prior week and that the process includes department meetings, an April 21 draft-budget workshop, individual council briefings and a May community budget meeting before a public hearing and adoption in June.

Council questions during the budget discussion covered contingency planning for possible state or federal funding reductions, use of ARPA funds in reserves, and plans for major projects including the Mission Playhouse restroom/visioning work and a potential future public-safety facility. City leaders said the near-term approach would be conservative: staff will present a draft budget that preserves reserves, funds agreed priorities and phases larger facility studies and master planning so the council can decide whether to proceed and how to fund construction or remodeling.

Ending: Council thanked finance staff and auditors for the work. No formal vote on the financial report or budget was recorded in the meeting transcript; staff confirmed follow-up items and upcoming workshops and council briefings.